Personal Finance in a Deflationary Period
(This is the first of what I hope to be a pair of posts. This one will address the personal finance issues; the other, over on Advice Unasked, will address broader issues of economics and policy.) Don't hold debt. Most salaries will not rise in this period; we will not be in a better position to pay down debt in the future. In general, debt securities are preferable to equities in deflationary times, however this only applies if the debt securities are trustworthy—hard to judge in the current regulatory and financial reporting regime. There is something to be said for a savings account, or even cash in an actual safe, though the safe carries a risk of burglary. Most property is likely to fall in value in this period. Speculation will at times raise the prices of some valuables like jewels and precious metals through this period, however this is not something to be relied on; even speculators can run short of cash. Bartering personal services in this period is a way to conserve...